CAE Inc Net Income jumped on 13.8% in 2016 and Revenue surged on 11.9%
19.05.2016 • About CAE Inc (
$CAE) • By InTwits
CAE Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CAE Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 6.5%.
- CAPEX is quite volatile: 567 in 2016, 706 in 2015, 787 in 2014, 340 in 2013, 166 in 2012
- The company has business model with average profitability: ROIC is at 10.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.4x while industry average is 1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CAE Inc ($CAE) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,821 | 2,035 | 2,078 | 2,246 | 2,513 | 11.9% |
| Gross Profit | 600 | 585 | 565 | 604 | 696 | 15.3% |
| SG&A | 256 | 264 | 259 | 265 | 312 | 17.7% |
| EBITDA | 428 | 377 | 454 | 522 | 553 | 6.0% |
| Net Income | 180 | 138 | 190 | 202 | 230 | 13.8% |
Balance Sheet
|
|---|
| Cash | 287 | 260 | 312 | 330 | 486 | 47.1% |
| Short Term Debt | 136 | 71 | 51 | 56 | 119 | 115.0% |
| Long Term Debt | 686 | 1,003 | 1,118 | 1,224 | 1,154 | -5.8% |
Cash flow
|
|---|
| Capex | 166 | 97 | 157 | 144 | 118 | -18.3% |
Ratios
|
|---|
| Revenue growth | 11.7% | 11.8% | 2.1% | 8.1% | 11.9% | |
| EBITDA growth | 9.1% | -12.0% | 20.5% | 15.0% | 6.0% | |
| Gross Margin | 33.0% | 28.7% | 27.2% | 26.9% | 27.7% | 0.8% |
| EBITDA Margin | 23.5% | 18.5% | 21.8% | 23.2% | 22.0% | -1.2% |
| Net Income Margin | 9.9% | 6.8% | 9.1% | 9.0% | 9.1% | 0.2% |
| SG&A, % of revenue | 14.1% | 13.0% | 12.5% | 11.8% | 12.4% | 0.6% |
| CAPEX, % of revenue | 9.1% | 4.8% | 7.6% | 6.4% | 4.7% | -1.7% |
| ROIC | 16.9% | 10.9% | 11.2% | 11.2% | 10.3% | -0.9% |
| ROE | 18.6% | 12.9% | 14.9% | 13.1% | 13.0% | -0.1% |
| Net Debt/EBITDA | 1.2x | 2.2x | 1.9x | 1.8x | 1.4x | -0.4x |
CAE Inc ($CAE) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 557 | 617 | 616 | 723 | 5.9% | 16.5% | 10.2% | 14.4% |
| EBITDA | 124 | 131 | 140 | 159 | 6.6% | 9.5% | 6.4% | 2.5% |
| Net Income | 44 | 69 | 58 | 59 | 6.2% | 60.4% | 8.9% | -8.3% |
Balance Sheet
|
|---|
| Cash | 284 | 377 | 541 | 486 | 1.3% | 35.7% | 105.4% | 47.1% |
| Short Term Debt | 113 | 122 | 126 | 119 | 129.5% | 136.3% | 144.1% | 115.0% |
| Long Term Debt | 1,179 | 1,192 | 1,211 | 1,154 | 4.0% | -2.7% | 2.3% | -5.8% |
Ratios
|
|---|
| Gross Margin | 28.3% | 25.8% | 27.3% | 29.1% | 2.4% | 0.1% | 0.7% | 0.3% |
| EBITDA Margin | 22.2% | 21.2% | 22.7% | 22.0% | 0.2% | -1.4% | -0.8% | -2.5% |
| Net Income Margin | 8.0% | 11.2% | 9.4% | 8.1% | 0.0% | 3.1% | -0.1% | -2.0% |
Revenue and profitability
The company's Revenue surged on 11.9%. Revenue growth showed acceleration in FY16Q4 - it increased 14.4% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.2 pp from 23.2% to 22.0% in FY2016.
Gross Margin increased slightly on 0.82 pp from 26.9% to 27.7% in FY2016. SG&A as a % of Revenue increased slightly on 0.62 pp from 11.8% to 12.4% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 CAE Inc had CAPEX/Revenue of 4.7%. CAE Inc showed almost no change in CAPEX/Revenue from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 6.2%.
Return on investment
The company operates at good ROE (13.04%) while ROIC is low (10.26%). ROIC decreased slightly on 0.94 pp from 11.2% to 10.3% in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.4x and Debt / EBITDA is 2.3x. Net Debt / EBITDA dropped on 0.4x from 1.8x to 1.4x in FY2016. Debt decreased slightly on 0.54% while cash surged on 47.1%.
Management team
CAE Inc's CEO is Marc Parent. Marc Parent is a founder and has 9 years tenure at the company.
Appendix 1: Peers in Industrial
Below we provide CAE Inc benchmarking against other companies in Industrial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Diversified Royalty Corp ($DIV) | | | | 503.3% | |
| WSP Global Inc ($WSP) | | 60.3% | 44.0% | 108.9% | 5.2% |
| CEMATRIX Corp ($CVX) | | -5.6% | 7.9% | 76.5% | -37.6% |
| Carmanah Technologies Corp ($CMH) | | -2.0% | 68.8% | 56.0% | -30.0% |
| STT Enviro Corp ($STT) | 10.3% | -2.6% | -21.4% | 51.1% | |
| |
|---|
| Median (65 companies) | 10.1% | 5.7% | 10.2% | 8.5% | 3.2% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
| Omni-Lite Industries Canada Inc ($OML) | 55.3% | 54.9% | 54.9% | 54.8% | |
| Stantec Inc ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
| |
|---|
| Median (59 companies) | 22.6% | 22.8% | 20.1% | 21.1% | 22.2% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 45.9% | 46.8% | 50.9% | 54.3% |
| Canadian Pacific Railway Ltd ($CP) | 26.1% | 32.4% | 43.7% | 48.9% | 51.6% |
| Photon Control Inc ($PHO) | 17.6% | 24.8% | 29.3% | 38.3% | |
| Omni-Lite Industries Canada Inc ($OML) | 17.7% | 17.0% | 20.4% | 26.2% | |
| Badger Daylighting Ltd ($BAD) | 25.7% | 25.9% | 27.9% | 24.6% | 24.2% |
| |
|---|
| Median (63 companies) | 9.6% | 7.9% | 7.1% | 7.5% | 11.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
| Cargojet Inc ($CJT.A) | 7.0% | 6.3% | 54.1% | 41.3% | |
| Algoma Central Corp ($ALC) | 15.9% | 7.3% | 5.0% | 27.4% | 58.2% |
| Canadian Pacific Railway Ltd ($CP) | 20.2% | 20.2% | 21.9% | 22.7% | 19.0% |
| Canadian National Railway Co ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (64 companies) | 3.1% | 3.6% | 4.2% | 3.5% | 4.3% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($IBG) | 4.8% | -9.0% | 11.6% | 21.9% | 26.2% |
| IWG Technologies Inc ($IWG) | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% |
| Winpak Ltd ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
| Intertape Polymer Group Inc ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (55 companies) | 10.4% | 9.5% | 9.5% | 8.3% | 9.0% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($CFF) | | 2.7x | 6.1x | 35.9x | 3.6x |
| Ag Growth International Inc ($AFN) | 2.9x | -0.1x | 2.1x | 14.1x | |
| Cargojet Inc ($CJT.A) | 1.5x | 1.5x | 31.5x | 12.9x | |
| Progressive Waste Solutions Ltd ($BIN) | 4.5x | 3.3x | 2.9x | 10.6x | 3.8x |
| Finning International Inc ($FTT) | 2.3x | 1.8x | 1.4x | 9.4x | 2.5x |
| |
|---|
| Median (56 companies) | 1.5x | 1.6x | 1.3x | 1.0x | 1.9x |
|---|
